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The advent of powerful new multicore processors is adding impetus to a shift away from older forms of licensing, such as per-processor licensing, to per-user and even subscription licenses, as ISVs offer their products on demand over the Web or as a utility service.

"We have been out advocating since last fall that in terms of multicore processors, ISVs should license by the processor and not by the processor core," said Margaret Lewis, software strategy manager with AMD, based in Sunnyvale, Calif.

Generally, operating system vendors have adopted the policy of licensing by processor as opposed to processor core, and they also have applied it to various server and application software products that they offer, not just the operating systems, she said.

One exception is Oracle Corp., which licenses its database and server software per core rather than per processor, Lewis said. However, Oracle supports various licensing models, including site licenses and per-user licenses, depending upon what they negotiate with customers.

Some software companies that market software that runs on multicore RISC chips also license per core rather than per processor, Lewis said. IBM, for example, continues to license software by the core for RISC processors, "even though they have changed their methodology for x86 and theyre going to license by processor," she said.

But even licensing by processor has become the exception rather than the rule in the software industry.

An October 2004 study of software licensing, sponsored by Macrovision Corp. with the Software and Information Industry Association, showed that currently only about 25 percent of software vendors license software on a per-processor basis.

The predominant licensing model is per seat, whether for individual machines or servers, which is supported by 56 percent of the vendors polled. The runner-up is concurrent user licensing, which is offered by 40 percent of the vendors.

The study also shows that subscriptions are the fastest-growing licensing model among software vendors. The number of vendors offering monthly, annual or other limited-term licenses will grow at least 17 percent over the next two years, according to the study, while the number of vendors offering perpetual product licenses will also decrease by 17 percent.

The study also predicts that by 2006, the number of vendors offering software subscriptions will gain parity with perpetual licensing, which is a license for the useful life of the software package.

However, AMD is advising dual-core processor buyers to avoid higher costs that might come with purchases of software that is licensed on a per-core basis. Buyers should negotiate alternative licensing terms, such as a flat-rate site license, whenever possible, the company said.

They should also consider purchasing two-processor servers rather than four-processor servers to stay within the standard edition limits of Microsoft Windows or other operating systems and applications.

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